Shares in Spirit Airlines sank by more than one-third as reports say the airline is mulling a bankruptcy filing.
Shares were down 37% as the WSJ reported a Chapter 11 filing was being discussed.
The airline’s value is down 85% this year, although the share price rallied slightly in afternoon trading.
Spirit has a heavy debt pile and has just weeks to refinance $1.1 billion in bonds which are due next year.
CEO Ted Christie said earlier this month the airline wouldn’t need to file for bankruptcy; however, it has taken measures to cut costs by cutting jobs and underperforming routes.
Its long-term debt is over $3 billion.
The WSJ reported Spirit was in talks with bondholders over a possible bankruptcy filing.
Spirit’s short-term future has been in doubt since the proposed $3.8 billion merger with JetBlue Airways was blocked.
The airline hasn’t reported a profit in the last five out of six quarters, despite high demand for air travel pushing up airfares.
